Bob's Button is an unincorporated business that began operations on September 1, 2014. The owner/operator is Bob Pope and his business is selling decorative and promotional buttons to various clients throughout the city of Toronto and online. Clients include political parties, retail and online stores, sports teams, various religious organizations.
When he began operations in 2014, he acquired the following assets:
A building to house his operations. The total cost f the building was $862,000, including an estimated $220,000 for the land. The building is used exclusively for his business, with 92 percent of the space being used for manufacturing the buttons. The building is allocated to a separate Class 1.
Furniture and fixtures with a cost of $120,000.
Two customized delivery vehicles at a cost of $36,000.
Bob's business policy is to take maximum CCA. During 2015, the following transaction involving capital asset take place:
As the business has enjoyed early success, on April 1, Bob purchases a $110,000 Lexus. He has large logos of the business painted on both sides of the vehicle. Since Bob inherited a Jeep, a Ferrari and a BMW motorcycle, he drives the Lexus 100 percent for business purposes.
The business acquired four new delivery vehicles at a cost of $38,000 each. As a part of this purchase, the two vehicles acquired in 2014 are traded in. An allowance of $21,000 is received for each vehicle.
As Bob believes in free speech and has been told repeatedly by his family that he has a very twisted sense of humor, some of his favourite buttons have created social media firestorms. After Bob receives death threats, he decides to terminate his business in 2016 and start a new home security business in Alberta. By December 31, 2016 all of the assets are sold. The proceeds are as follows:
Building The building is sold for $903,000, with $220,000 of this value allocated to the land on which the building is situated.
Furniture and Fixtures These assets are sold for $53,000.
Delivery Vehicles The four delivery vehicles are sold for $34,000 each.
Lexus The Lexus is sold for $62,000.
Required: Determine the maximum CCA that can be taken in each of the years 2014 through 2016. In your calculations, include and identify the UCC balances for January 1, 2015, January 1, 2016, January 1, 2017.
In addition, indicated any tax effects resulting from the 2015 and 2016 dispositions. Ignore GST/HST considerations.